The recent one-year anniversary of
the U.S. Supreme Court’s noxious Kelo v. New London decision provides an
opportunity to review developments in the fight to protect property rights.
While federal reform efforts have stalled, Michigan residents are well placed to
prevent the government from cynically confiscating the property where they live,
work and worship.

While federal reform efforts have stalled, Michigan residents are well placed to prevent the government from cynically confiscating the property where they live, work and worship.

The U.S. Constitution allows the
government taking of private property only when it is for a "public use" and
just compensation is paid. In Kelo, the Supreme Court held that a municipality
may take private property and turn it over to another private party for
"economic development," i.e. increased tax revenue for the municipality. The
ruling so undermined the federal public use requirement that it became
meaningless.

Two of the most well-known Kelo
plaintiffs are Susette Kelo and Wilhemina Dery, who both owned homes in the area that New London, Conn., officials are seeking to "redevelop." Kelo has been forced to leave her property. Wilhemina was able to spend the entire 88 years of her life in her home; she passed in March of this year before New London officials
could get their hands on the property. Her husband, Charles, who had lived with
her since they were married in 1946, acceded to the ultimatum since he was
unable to maintain the home on his own.

While the New London homeowners are
the most well known, they are not alone. Nationally, many homeowners, business
owners and churches have been assailed by local governments post-Kelo. Justice
O’Connor predicted as much in her dissent in Kelo:

"Any property may now be taken for
the benefit of another private party, but the fallout from this decision will
not be random. The beneficiaries are likely to be those citizens with
disproportionate influence and power in the political process, including large
corporations and development firms. As for the victims, the government now has
license to transfer property from those with fewer resources to those with more.
The Founders cannot have intended this perverse result."

Federal legislative efforts to
prevent such abuses have stalled. The U.S. House passed a bill, H.R. 4128, which
would prohibit economic development takings when a state or municipal government
receives federal economic development funds. But that bill has been languishing
in the Senate.

The only bright spot in Kelo was
the Supreme Court’s recognition that states could provide more protections to
property owners than the justices themselves could manage to find in the U.S.
Constitution. To be effective, the states need to protect against both takings
for economic development and takings to cure "blight." Blight is often poorly
defined, allowing a government to declare nearly any property blighted,
particularly when this determination is made on an area basis as opposed to a
property-by-property basis. The practical effect is that even if economic
development takings are forbidden, local governments can still attain their
desired results by declaring a neighborhood "blighted" and handing it over to a
developer.

In Michigan, economic-development
takings are forbidden due to the Michigan Supreme Court’s decision in Wayne
County v. Hathcock, which held that such takings are not a "public use" under
the Michigan Constitution. Hathcock reversed a 1981 court decision, known as
Poletown, wherein an entire Detroit neighborhood was leveled for an auto plant.
But the potential for "blight" abuse remains in Michigan. In fact, the city of
East Lansing has declared a prime 35-acre area adjacent to the Michigan State
University campus to be "blighted" despite the fact that the area includes
numerous thriving apartment buildings, businesses and rental homes.

The Michigan Legislature has
proposed a constitutional amendment, SJR-E, which would severely limit potential
takings abuses and will appear on the November ballot. If enacted, SJR-E would
explicitly prohibit economic development takings, preventing any possibility of
a future court returning to Poletown. The amendment would require the government
to meet a heightened burden of proof for takings and pay a premium when taking
an owner’s principal residence. Finally, it requires blight to be determined on
a property-by-property basis. Legislation is also pending in the state
Legislature that would tighten the definition of blight. If this legislation and
SJR-E are passed, Michigan’s residents will be well protected against potential
takings abuse.

#####

Patrick J. Wright is senior legal analyst at the Mackinac Center for Public Policy, a
research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or
in part is hereby granted, provided that the author and the Center are properly
cited.

ISSN: 1093-2240,
SKU: V2006-20

Summary

The Supreme Court’s Kelo v. New London decision undermined the very property protections our Founders intended to secure. Through the Legislature and state courts, Michigan has an opportunity to establish itself as a guardian of property rights.